North Carolina Media Quash Subpoena in Federal Court

North Carolina media organizations won a significant victory in the U.S. District Court for the Middle District of North Carolina last week when a group of the state’s media outlets convinced a federal judge to quash subpoenas that sought from the media nearly two years’ worth of news coverage of the Eve Carson murder investigation and court proceedings.

Counsel for Demario James Atwater, the defendant in the federal criminal case, issued subpoenas to media organizations across the state generally seeking all publicly aired broadcasts or published news articles regarding the death of Eve Carson and the defendants, as well as all web articles and public comments posted to those web articles maintained by the news media. The defense counsel issued the subpoenas to the media to look for support for the defendant’s request to change the location of the federal criminal trial from the Middle District of North Carolina to a federal court in Virginia. The defense has argued to the court that Atwater cannot obtain a fair trial before an impartial jury in the state of North Carolina due to the media coverage of the murder and the defendant.

Seventeen media outlets fought the defendant’s subpoenas in court on March 10, 2010, rather than turn over the material willingly to the defense. Their oral argument mostly focused on Rule 17(c) of the Federal Rules of Criminal Procedure and the standards set forth in United States v. Nixon, 418 U.S. 683, 699-700 (1974). Each of the companies argued to the court that the defendant’s subpoenas were “overbroad,” “unreasonable,” and/or “unduly burdensome” because compliance would force the news media to cull through two years’ worth of news coverage—at the media’s expense. Complying with the request could take weeks or months and thousands of dollars in some cases, according to media attorneys.

The media attorneys also argued that the material sought by the defense was readily available on each company’s website or, in the case of newspapers, in the public library. In other words, the defense counsel has a readily available alternate means of obtaining the information without requiring the media to take on the burden of finding and delivering the material.

During the hearing, the defense counsel could not identify any inflammatory news story that might prejudice the jury pool and jeopardize Atwater’s federal criminal trial.  The only specific news coverage the defense attorney could point to was repeated images of the defendant going and coming from legal proceedings in a prisoner's jumpsuit---all factual occurences.

After hearing from the attorneys representing the 17 media companies and the defense, Chief District Judge James A. Beaty, Jr. ruled from the bench that the media would not be compelled to produce the material sought.  The judge would order the media to comply with the subpoena when the material sought could be obtained by the defense through publicly available sources, such as the internet and public library. During questioning, Judge Beaty seemed particularly concerned that honoring the subpoena would shift the defendant's burden to obtain material to support his case from the defendant to the media. 

The victory in this case is important because complying with a subpoena—especially a very broad one that covers a long period of time—costs time and money. With news rooms stretched as thin as they are in these difficult economic times, the media simply do not have the resources to devote personnel to reviewing video footage or website postings to comply with a subpoena. Subpoenas issued to the media divert precious human resources from newsgathering activities. And, in a case, like this one, where the criminal defendant cannot identify a single news story that is inflammatory or prejudicial to the defense, requiring the news media to participate in a “fishing expedition” is especially unfounded. 

The victory is also significant because the subpoenas were issued in a federal proceeding, which meant that North Carolina's reporter's shield statute was unavailable.  We've reported on the halting process by which media interests have pushed to have Congress pass a federal shield statute, to date without success.

The only issue before the court on March 10 was whether or not the media would be required to comply with the subpoena and be forced to turn over documents and video. Judge Beaty will rule on the defendant’s request to change venue of Atwater’s federal trial at later date.

The Carson murder has garnered significant local and national media attention. This is at least the second time the news media has become involved in the legal proceedings against the two people accused of the crime. We covered the media’s efforts to obtain access to sealed search warrants in the state court actions here.

Massachusetts High Court Extends Fair Report Privilege

In late January, the Supreme Judicial Court of Massachusetts affirmed that the fair report privilege applied to information attributed to an anonymous source.  The 6-1 decision in Howell v. The Enterprise Publishing Company dismissing the plaintiff's complaint held that so long as the reporter accurately reported what the confidential source reported to him or her, the privilege applied.

As reported by the First Amendment Center, the case involved claims for defamation, intentional infliction of emotional distress and invasion of privacy brought by the former superintendent of the town sewer department who, the defendant reported, had been fired for having pornography on his work computer and for alleged conflicts of interest.

 The paper wrote a series of more than 10 articles about the scandal, many of which quoted anonymous sources who reported what happened at various closed-door meetings concerning the superintendent (Howell).  For example, the paper reported:

A town official close to the investigation who spoke on condition of anonymity said the allegations against Howell include improper use of town equipment for personal business. The source declined to specify the type of equipment that was used but alluded to a possible criminal investigation by Abington police.

 In a later article, the paper reported: 

"These were images you wouldn't want your children  to see," the commission member said. Commission members would not say who came forward with the allegations against Howell. "The point is, it happened. The board, acting on behalf of the town, was forced into action and would have been negligent if it had not acted. The potential is still very real for a sexual harassment lawsuit," the commission member said. The source added that Howell "thinks he did nothing wrong."

In dismissing Howell's claims, the Court engaged in a lengthy analysis of the history and policy considerations underlying the privilege.  The Court identified two key policies supporting broad recognition of the fair report privilege.  The first, the Court said, "protects the press when it reports on official actions and statements that members of the public could have witnessed for themselves, that is, when it acts as the public's eyes and ears."  The second key policy is that of "public supervision," meaning the role of the media in serving as "a check on the power of government by giving the public the opportunity to be informed citizens and voters."

In the case of a report of government action (i.e., "official action") whose source is anonymous, the Court said

Reports of official statements are covered by the privilege so long as the reports fairly and accurately describe the statements, even though the statements themselves may contain defamatory material, or inaccurately report on official actions in a defamatory way. But an anonymous statement is not an official one. The privilege to report official actions would mean very little, however, if to qualify for its protection, the media were limited to reporting such actions solely on the basis of on-the-record statements by high-ranking (authorized to speak) officials or published official documents. Consequently, the privilege extends to reports of official actions based on information provided by nonofficial third-party sources.  It should be of no moment that a reporter's source is, in fact, a high official, a low official, or a mere witness who overheard the proceedings, so long as it is official action that is reported. If, however, the source is an unofficial or anonymous one, a report based on that source runs a risk that the underlying official action will not be accurately and fairly described by the source, and therefore will not be protected by the privilege, or that the information provided will go beyond the bounds of the official action and into unprivileged territory.

Thus, the Court established that so long as a news report of official action based on material from an anonymous source fairly and accurately reports what the source said, it will be privileged.

Given the increasing prevalence of off-the-record or "background" sources in news stories concerning issues of public concern, this decision may be an important landmark in protecting the media from otherwise baseless lawsuits.

Florida Bill Limiting Access to 911 Calls Moves Forward

A committee of the Florida legislature this week approved on a party-line vote a bill that would require a court order to access 911 call recordings.  This development follows on the heels of efforts in several other states to curtail access to 911 calls under state sunshine laws, a trend on which we previously reported.

On Wednesday, the Government Affairs Policy Committee of the Florida House of Representatives approved by an 8-5 vote proposed committee bill 10-03a, with all Republicans on the committee voting for it and all Democrats voting against.  The bill would exempt "Any recording of a request for emergency services or report of an emergency using an emergency communications E911 system" from the public disclosure requirements of Florida's public records laws, including Section 119.07(1) and Section 24(a) of Article I of the Florida State Constitution.  A 911 recording could be released pursuant to a court order finding good cause for disclosure.  Upon request, a person could obtain a transcript of a 911 call, after 60 days and with all personal identifying information redacted.

The Miami Herald has reported that the 911 bill is a top priority of the Speaker of the Florida House, Larry Cretul, who took the unusual step of stacking the Government Affairs Policy Committee meeting Wednesday with an extra Republican to ensure passage.  A powerful ally of Speaker Cretul has urged Cretul to secure passage of such a law after he lost his son and subsequently heard a recording of the 911 call on a news broadcast.

The Florida bill therefore follows a pattern we noted in other states where similar bills are under consideration -- anecdotal evidence of the broadcast of wrenching 911 calls is cited in support of sweeping measures that would eliminate access to 911 recordings in most cases.  These bills appear driven more by a misguided desire to exercise editorial control over the use of 911 recordings by news organizations than by any genuine problem associated with access itself.  In fact, the Florida bill recites as a policy basis the notion that "there are those persons, who, for personal, private gain or for business purposes, would seek to capitalize on individuals in their time of need."

This bill and others like it underscore a prominent person upset with the use of a public record in a particular circumstance can succeed in having legislative bodies consider wholesale changes to everyone's access to public records.  This is a troubling trend.

The Florida bill faces an uncertain fate, as it is opposed by Florida Democrats and Governor Crist, and it must pass by a supermajority vote.  We will continue to follow the progress of this bill.

Newsroom Legal Fights Go On, Even in Bad Economy

The New York Times ran an interesting report on how the bad economy has impacted newspapers' decisions on whether to litigate public record and access issues.  The bottom line, according to the Times -- while smaller, regional news organizations are scaling back their legal efforts, large national outlets "have been quietly ramping up."

The Times cited in particular Hearst and the Associated Press as two organizations that have been as aggressive as ever in pushing state and federal officials on public record and access issues.  According to the story, both are dealing with tighter budgets by bringing more of their legal work in-house, rather than using outside counsel.

Eve Burton, vice president and general counsel at Hearst, told the Times that Hearst was at an all-time high in the number of access cases it was pursuing.  Hearst's most high-profile fight is in Texas, where it has sued the governor's office for records relating to the 2004 execution of Cameron Todd Willingham, a man many death penalty opponents believe may have been innocent.

The A.P. and Bloomberg News have also been in high-profile legal fights with Treasury Department officials over Freedom of Information Act requests they have filed, the Times reported.

Unfortunately, the Times found, smaller news organizations are choosing to forgo possibly expensive legal fights because their budgets simply will not allow them.

This reluctance only highlights the importance of attorneys' fees provisions in public records statutes, as they are often the only way to truly hold government officials accountable when they improperly withhold public records.

States Move to Curtail Access to 911 Calls

The Associated Press reported this week of efforts underway in several states to limit access to 911 calls under state sunshine laws.  According to the report, legislatures in Alabama, Ohio, and Wisconsin are considering bills that would pull back from the traditional availability of 911 recordings.  Missouri, Pennsylvania, Rhode Island, and Wyoming currently exempt 911 calls from the operation of public records statutes.

In Alabama, HB 159 passed the Alabama House earlier this month.  The bill, if enacted, would prevent the disclosure of 911 calls to the public without a prior order from a judge, who would consider "whether right of the public to the release of the recording outweighs the privacy interests of the individual who made the 911 call or any persons involved in the facts or circumstances relating to the 911 call."

Under SB 105, a bill introduced this session in the Ohio General Assembly, 911 calls would remain public records but members of the broadcast media would be barred from "play[ing] a recording of a 9-1-1 call that has been made available as a public record over a broadcast medium such as radio, television, or the internet."  Transcripts of 911 calls could be read over the air.  Violation of the provision would subject the broadcaster to a $10,000 fine.

In Wisconsin, AB 612 as originally introduced would prevent disclosure of 911 audio recordings, with transcripts remaining available for copying.  The bill was subsequently amended in committee to permit inspection but not copying of 911 recordings.

These bills appear to be driven by the reaction of some to isolated editorial choices made by television stations.  As the AP article recounts, the sponsors of these bills cite anecdotal accounts of a person who suffered a traumatic loss later hearing a 911 recording made in connection with the loss.  The problem with these moves to curtail access to 911 calls is that they allow the tail of a few questionable decisions by news editors to wag the dog of access to government records generally.  Police incident reports, arrest reports, and 911 recordings provide important sources of information for reporters to cover local law enforcement agencies, and 911 recordings in particular provide a way of monitoring the responsiveness of 911 call centers.  

The principle that government records should be freely available, no less so than the First Amendment's protections to free speech, comes with consequences.  Sometimes people say things that hurt; sometimes reporters broadcast stories their viewers don't like.  However, these consequences should not cause legislatures to lose sight of the greater societal value of government transparency.

N.C. Court of Appeals Holds Libel Complaint Sanctionable

Earlier this month, the North Carolina Court of Appeals affirmed the Rule 12(b)(6) dismissal of a defamation action, holding that the filing of the complaint was sanctionable under Rule 11.  In Ward v. Jett Properties, LLC, the plaintiff filed an action pro se, contending that his landlord defamed him in a letter sent to a representative of the homeowners association of the development where the plaintiff lived.

The matter started with a letter the plaintiff sent to the defendant, complaining about various actions by neighboring tenants.  In response, the defendant wrote back, threatening to evict the plaintiff, to direct the homeowners association to take over his parking spot, and to report him to local law enforcement for failing to obtain North Carolina tags on his vehicle.  The plaintiff contended that the letter was delivered to the homeowners association as well.

The plaintiff filed a lawsuit, alleging that the letter was libelous per se and per quod, in that it accused the plaintiff of, among other things, engaging in "continued harassment" and "pestering behavior," "stalking" others in the neighborhood, being a "nuisance," lodging "irritating and unwarranted complaints," and causing "trouble" and "problems."

In considering whether these allegations stated a claim for libel per se, the Court of Appeals first set out the four categories of libel per se:

a publication which, when considered alone without explanatory circumstances: (1) charges that a person has committed an infamous crime; (2) charges a person with having an infectious disease; (3) tends to impeach a person in that person's trade or profession; or (4) otherwise tends to subject one to ridicule, contempt or disgrace.

The plaintiff contended that the letter at issue satisfied the fourth category.

The Court of Appeals disagreed, holding that the statements in the letter, understood "as ordinary people would understand them," were not libelous per se because they amounted to rhetorical hyperbole.  In particular, the court held that accusations of dishonesty, harassing behavior, and unfavorable or disreputable personal habits cannot support a per se claim for defamation.  The court concluded that the trial court therefore properly dismissed the plaintiff's claim at the Rule 12(b)(6) stage:

In this case, defendant's letter was sent in response to a demand letter by plaintiff, accusing defendant of misconduct.  In this context and after reading the entire document, defendant's characterization of plaintiff's conduct as harassment, pestering, threatening, irritating, and nonsense amounts to statements of opinion or rhetorical hyperbole that are not actionable as libel per se.

The plaintiff's per quod claim likewise failed to state a claim because the plaintiff failed to allege any pecuniary loss from the letter at issue.

The Court of Appeals also affirmed the trial court's finding that the filing of the complaint was sanctionable under Rule 11.  The trial court rested its sanction on a finding that the plaintiff had filed at least four previous complaints against the defendant, all of which had been dismissed, and had filed a number of other actions against others.  The Court of Appeals held that these findings were sufficient to satisfy the standard under Rule 11 for imposing a sanction.  However, the court remanded the matter for further findings of fact with respect to the $2,000 sanction imposed.

 

New York Court Rejects Effort to Identify Anonymous Internet Speaker

In yet another data point on the status of anonymous Internet speech, a New  York judge this week quashed a subpoena seeking the identity of a person who had posted comments on a newspaper website.

We have covered this topic in a number of prior posts, for example here, here, and here, as courts have grappled in the past year with the question of when to enforce subpoenas to media organizations that would compel the identification of an anonymous Internet speaker.  Such subpoenas have been examined both from a First Amendment perspective, in terms of the constitutional right to speak anonymously, and from a shield law perspective, as many of these subpoenas are problematic under state laws giving media organizations a qualified right to resist subpoenas.  Surveying these cases reveal that context matters -- is the party seeking disclosure a would-be defamation plaintiff seeking the identity of a defamer or a routine civil litigant; is the party a law enforcement agency or grand jury seeking information in connection with a criminal investigation.

In the recent New York case, an Orange County, New York grand jury issued a subpoena to the Chronicle, a weekly serving Chester and Goshen, New York.  The grand jury was apparently investigating comments that appeared on the Chronicle's website concerning the former superintendent of the Chester school system.  Because grand jury proceedings are secret, other aspects of its investigation are not publicly available.

At the hearing on whether to enforce the grand jury's subpoena, the presiding judge took the comments at issue into chambers and reviewed them with the district attorney.  According to local reports, after reviewing the comments, the judge indicated he did not believe they were criminal in nature.  Accordingly, he quashed the subpoena, concluding that the identity of the person or persons who posted the comments at issue was not critical to the matter being investigated by the grand jury.  Although the case was apparently argued from a First Amendment anonymous speech perspective, the court's approach is also consistent with the standard found in many shield statutes, which often require the party serving the subpoena upon a reporter to establish that the information sought is essential to a claim or defense in the pending matter.

The court appropriately recognized that in order to overcome the First Amendment right to anonymous speech, the party serving the subpoena must articulate a compelling justification.  If the party cannot establish that the sought-after information -- here the identity of the speaker -- is critical to a pending proceeding or investigation, then by definition no compelling justification exists.

We will continue to monitor court decisions in this area.

Judge Closes Hearing over John Edwards Sex Tape

The presiding judge closed a hearing Friday on whether to hold Andrew Young and his wife in contempt for failing to turn over a sex tape purportedly showing Rielle Hunter and disgraced former presidential candidate John Edwards consummating their much-publicized affair.  The hearing was held in Chatham County, North Carolina, and it was set in a lawsuit brought by Hunter to recover possession of the tape from Young.  Young, a former aide to Edwards, was apparently part of Edwards's misbegotten scheme to cover up his fathering of a child with Hunter, as Young originally claimed the child was his.  In a book he recently published, Young says he found the tape in the home where Hunter lived with Young's family for a period of time.

The tawdry story has blanketed tabloids and dailies, but on Friday it gave occasion to consider an important newsroom law issue.  At the hearing on whether to hold Young in contempt for not turning over the tape in response to a prior order, the judge without prior notice announced that he would hear argument in chambers, outside the presence of reporters and members of the public.  As was reported in the Raleigh News & Observer, the judge heard argument for approximately one hour before emerging and issuing his ruling that Young and his wife were in contempt and would be jailed if the tape is not turned over by 2:00 pm on Wednesday.

Although the trial court administrator contended that closing the hearing was within the judge's "discretion," summarily closing the hearing without notice, without affording the press an opportunity to object, and without entering factual findings supporting closure and reflecting the consideration of alternatives violated North Carolina law.  

The North Carolina Constitution specifically provides that "all courts shall be open."  This provision entitles members of the press and public to a qualified right to attend civil proceedings, such as the matter between Hunter and Young.  Based on the media reports of the hearing, there is no evidence that the judge considered alternatives to conducting the hearing in private or articulated any interests in secrecy that would overcome the presumption of access.

Unfortunately, it appears that none of the phalanx of media representatives who were present invoked a special North Carolina statute that provides a mechanism for gaining access to closed proceedings and sealed documents.  In particular, N.C. Gen. Stat. 1-72.1 provides:

Any person asserting a right of access to a civil judicial proceeding or to a judicial record in that proceeding may file a motion in the proceeding for the limited purpose of determining the person's right of access.

Once a motion is made under the statute, the court must convene a hearing "before conducting any further proceedings" relating to the matter in question.  Following the hearing, the court must

rule on the motion after consideration of such facts, legal authority, and argument as the movant and any other party to the action desire to present. The court shall issue a written ruling on the motion that shall contain a statement of reasons for the ruling sufficiently specific to permit appellate review. The order may also specify any conditions or limitations on the movant's right of access that the court determines to be warranted under the facts and applicable law.

The ruling is subject to immediate appellate review.  It is unfortunate that in this case the court's decision to close the proceeding was not put to the test under G.S. 1-72.1.  Nevertheless, the episode provides an important opportunity for reporters and editors to learn of this special procedural right they enjoy in North Carolina to challenge the closing of a courtroom or the sealing of a court record.

U.S. Supreme Court to Consider Access to Identities of Ballot Initiative Supporters

January has been a prolific month on the U.S. Supreme Court docket for cases raising First Amendment or other media issues.  In addition to the Citizens United and Presley decisions addressing limits on corporate political speech and access to jury voir dire proceedings, the Supreme Court earlier this month agreed to hear a case out of the Ninth Circuit involving public access to the petitions that put in place a controversial Washington ballot initiative.  The petitions were sought under a state sunshine law in an effort to learn the identities of those who supported placing the initiative on the ballot.  The case therefore presents an interesting collision of the First Amendment rights to speak anonymously and to peaceably assemble and state sunshine laws.

We previously reported on the Doe v. Reed case, which the Supreme Court stayed while considering the petition for certiorari it ultimately granted this month.  The case relates to Referendum 71, a ballot initiative that appeared on the November 2009 ballot in the State of Washington and was intended as a vehicle for overturning a law, passed earlier in 2009 by the Washington legislature, that granted legal rights to domestic partners equivalent to those enjoyed by married couples.  The initiative passed with slightly above 53% of the vote, a result that upheld the law.

The dispute in Doe v. Reed involves the question of whether the signed petitions that ultimately allowed Referendum 71 to appear on the ballot constitute public records are subject to disclosure under Washington law as public records.  Nearly 138,000 names appear on these petitions.  The plaintiffs brought suit in federal court, contending that those who had requested the petitions had indicated they would publish the list of names on the Internet.  Making the list available under public records laws, according to the plaintiffs, threatened to chill the First Amendment activity of supporters of Referendum 71.  The plaintiffs assert that those who petitioned to include Referendum 71 on the November ballot would face harassment from opponents of the ballot measure if their names were made publicly available.

The district court issued a preliminary injunction barring release of the names, concluding that "supporting the referral of a referendum is protected political speech, which includes the component of the right to speak anonymously."  The Ninth Circuit reversed, holding that signing one of the petitions at issue does not constitute anonymous speech because the petitions are not created in a way that is designed to protect confidentiality.  It held further that the district court erred in applying strict scrutiny to Washington's sunshine law, and, when intermediate scrutiny is applied, the sunshine law passes muster because "each of the State’s asserted interests is sufficiently important to justify the PRA’s incidental limitations on referendum petition signers’ First Amendment freedoms."

The fact that the Supreme Court agreed to hear the case may signal that the Ninth Circuit ruling's days are numbered.  If that occurs, a sweeping decision affirming the right to speak anonymously would appear to be an important First Amendment victory.  However, the outcome here -- in which a third party has asserted a constitutional challenge to a sunshine law -- has troubling implications for those in the newsroom.  Reporters face enough trouble securing materials under state public records statutes without interference from third parties.  Reversal of the Ninth Circuit's decision may encourage court challenges to public records laws by third parties such as public employees or private entities contracting with or seeking money from public agencies.  We will watch closely for the outcome in this case, which is set to be argued in April.

U.S. Supreme Court Strikes Down Limits on Corporate Political Speech on First Amendment Grounds

Yesterday, the United States Supreme Court ruled in Citizens United v. Federal Election Commission that corporations (and labor unions) may make unlimited expenditures to directly advocate for the election or defeat of a Federal candidate at any point in the election cycle.  The crux of the Court’s decision is that the First Amendment prohibits Congress from banning certain types of political speech based on the corporate identity of the speaker. The decision opens the way for greatly increased participation by corporations—large and small, for-profit and non-profit—in the election process.

Prior to yesterday’s decision, federal law, as amended by the Bipartisan Campaign Reform Act of 2002 (“BCRA,” informally referred to as the McCain-Feingold law), prohibited corporations and labor unions from purchasing ads that either expressly advocate the election or defeat of a Federal candidate or amount to an “electioneering communication”—that is, a communication that (1) “refers to a clearly identified candidate for Federal office,” (2) is made within 30 days of a primary election or within 60 days of a general election, and (3) is publicly distributed.  Since BCRA, corporations and labor unions have been permitted to engage in express advocacy and electioneering communications only through their political action committees (PACs).

The Supreme Court previously upheld the ban on corporate electioneering communications in 2003 in McConnell v. Federal Election Commission, relying on its holding in an earlier case, Austin v. Michigan Chamber of Commerce, that restrictions on corporate political speech are permissible in light of the Government’s interest in preventing “the corrosive and distorting effects of immense aggregations of wealth” by corporations.

In January 2008, Citizens United, a non-profit corporation, released a documentary entitled “Hillary: The Movie” about then-Senator Hillary Clinton, a candidate in the Democratic Party’s 2008 Presidential primary. Citizens United wished to make the documentary available through video-on-demand service within 30 days of the 2008 primary elections but feared that the film (and a series of three advertisements encouraging viewers to purchase the film through the on-demand service) would trigger the BCRA ban on electioneering communications because the film and ads “referred to” a Presidential candidate.  Citizens United sued in federal court seeking a declaration that the BCRA ban on electioneering communications is unconstitutional.  After a three-judge panel of the federal district court denied Citizens United’s requests for relief, Citizens United sought review in the Supreme Court.

The Supreme Court, in a 5-4 decision, yesterday held that “[t]he Government may regulate corporate political speech through disclaimer and disclosure requirements, but it may not suppress that speech altogether.”  In so holding, the Court overruled Austin (which allowed the Government to restrict corporate political speech) and invalidated BCRA’s ban on electioneering communications.  Citizens United reflects the Court’s adherence to the principle that the Government cannot suppress political speech based on the speaker’s corporate identity.

Beginning with the premise that BCRA erects an outright ban on core political speech by corporations and unions, the Court applied “strict scrutiny” to the ban, requiring the Government to demonstrate that the law furthers a compelling interest.  The BCRA ban did not withstand that scrutiny: the Court found “no basis for the proposition that, in the context of political speech, the Government may impose restrictions on certain disfavored speakers,” including corporations.

The Court addressed and rejected all three “interests” proposed by the Government to support the electioneering communications ban: (1) the “anti-distortion” theory adopted by Austin, (2) an interest in preventing corruption, and (3) and an interest in protecting “dissenting shareholders.”

The Court first declared that First Amendment protections cannot turn on a speaker’s financial ability (that is, “immense aggregations” of corporate wealth) to engage in political speech.  On that point, the majority was particularly troubled by the prospect that the anti-distortion rationale for the BCRA ban could be used to prohibit political speech by media corporations, which are currently exempted from the ban on electioneering communications.  The Court likewise rejected the anti-corruption rationale because independent expenditures simply do not present the same risk of quid pro quo corruption (or the appearance of corruption) as do direct contributions to candidates and parties.  And it rejected the shareholder protection rationale—that shareholders should not be compelled to fund corporate political speech with which they disagree—as both underinclusive (because the statute only bans some corporate speech at certain times) and overinclusive (because it applies even to single-shareholder corporations).

The Court concluded that “the First Amendment does not permit Congress to make categorical distinctions based on the corporate identity of the speaker and the content of the political speech.”  With Austin thus set aside, the Court rejected the ban on corporate independent expenditures (for both electioneering communications and for express advocacy), because the law’s “purpose and effect are to silence entities whose voices the Government deems to be suspect.”  Given the primacy of political speech in our representative democracy, the Court said, “political speech must prevail against laws that would suppress it.”

The Court did not go so far as to strike down the BCRA disclaimer and disclosure requirements.  In the Court’s view, while more political speech enhances the political process, that speech should be transparent, so that the public can better evaluate the political message and the potential bias of the speaker.

The Citizens United decision is breathtaking in scope.

First, the content of political expenditures by corporations and unions is no longer at issue, because corporations and unions are no longer limited to engaging in so-called “issue advocacy.” Rather, they may now purchase advertising that includes a direct appeal to vote for or against a Federal candidate.  The distinction between “issue” and “express” advocacy by corporations and unions—which has muddled campaign finance law for so long—is dissolved.

Second, the timing of political expenditures by corporations and unions is no longer at issue.  After the Supreme Court held that corporate and union political expenditures are no longer limited to issue advocacy, it also struck down the BCRA prohibition on “electioneering communications”—and, with it, the 30- and 60-day windows that governed corporate political ads.  As a result, the Supreme Court’s test for distinguishing between permissible and prohibited electioneering communications articulated in 2007 in Federal Election Commission v. Wisconsin Right to Life is already a relic of campaign finance law.

Third, the number of entities that benefit from the decision is enormous.  The decision applies to all corporations and unions regardless of size or tax status.  This means that both traditional for-profit corporations and tax-exempt political organizations—e.g., Section 527 organizations such as Moveon.org and Club for Growth—may make unlimited political expenditures to expressly advocate for the election or defeat of a Federal candidate.

Fourth, the Court’s reasoning calls into question similar campaign finance laws enacted by nearly half the States.

Yesterday’s ruling does not, however, alter the longstanding bar on direct corporate contributions to federal political candidates. Corporations and unions continue to be prohibited from making contributions to federal candidates from their general treasuries.
 

*     *     *

The Citizens United decision has already generated a massive volume of commentary, some positive, some negative.  President Obama, for his part, has vowed to "develop a forceful response" to the decision, which he asserted gives "a green light to a new stampede of special interest money in our politics."  The U.S. Chamber of Commerce hailed the ruling, stating that it "protects the First Amendment rights of organizations across the political spectrum, and is a positive for the political process and free enterprise."

As the Court itself acknowledged, the decision undoubtedly ushers in a new era of campaign finance in America, namely pairing corporate independent expenditures with disclosure requirements.  It remains to be seen whether Congress will make a renewed effort to limit participation in the political process by corporations.